I’m a sports attorney and founder of GAME, Inc., where I work on the business of college sports. I run one of the biggest college basketball tournaments in the country, manage the careers of dozens of coaches, and consult in the building of successful programs throughout the college football and basketball landscape. I also help universities better protect student-athletes with Collegiate Sports Advisors (CSA) and teach Sports Management at my Alma mater, Rutgers University. You can follow me on twitter: jasonbelzer, or Circle Me on Google+

How RSE Ventures Is Revolutionizing Business As We Know It

Projected to grow $145 billion between 2010-2015, the sports industry has long been one of the fastest growing sectors of the global economy. However, unlike comparative industries, sports has somehow managed sustained growth while lacking any fundamental innovation to the business models that fuel it. In fact, the vast majority of the money within the industry propagates from just single area: professional sports leagues and properties, and the fees those entities garner form the sale of tickets as well as media and sponsorship rights.

This stable growth without the necessity to pursue risky innovation is a formula that has, not surprisingly, attracted some of the world’s most powerful individuals and organizations to invest into sports. Yet if one combines such information with keen entrepreneurial forethought, they can draw an even more valuable conclusion – that the sports industry is ripe from disruption.

It was this revelation that in 2012 led billionaire real estate magnate and Miami Dolphins owner Stephen Ross to join forces with former New York Jets VP Matt Higgins and create RSE Ventures, a company that has eschewed decades of prevailing business philosophy for a revolutionary new approach to spawning world changing ideas and enterprises.

Part venture capital firm, part incubator, RSE Ventures was founded with the goal of fusing an eclectic mix of industries together to generate groundbreaking change within each area of focus. The progress they seek is simply not achievable, nor sustainable, through the implementation of traditional notions of entrepreneurial management. Hence RSE’s unique value proposition – the company literally acts as a catalyst, provoking unprecedented growth within the organizations it incubates and invests in through the strategic deployment of innovative managerial, human capital and organizational processes.

If a casual observer were to walk into RSE’s office on any given day, the activities and interactions witnessed between the companies therein would, on the surface, resemble those that occur at large sports marketing and events firms such as Creative Artist Agency (CAA) or International Management Group (IMG). That being said, while RSE incubates and invests in a public relations firm (Derris & Co.), major event production company (Relevent Sports), sports marketing agency (Insignia SE) and media rights consulting practice (Catalyst Media Group), among others, it deliberately keeps each as its own separate entity to avoid the pitfalls that afflict most conglomerates. This calculated organizational strategy is specifically designed to prevent stagnation, eliminate quagmire and maximize the nimbleness of each company.

According to Arne Rees, who was hired by Higgins and Ross to become RSE Venture’s Chief Operating Officer, “In many big corporations, you have complex and difficult to navigate matrix structures where divisions are forced to interact in certain ways so as to create overlapping responsibilities and, consequentially, enormous amounts of bureaucracy. It’s exactly that type of environment that can destroy culture and promote political behavior. It’s tough for things to get done because everyone’s focus becomes survival instead of accomplishing the task at hand.”

The professional marriage of real estate magnate Stephen Ross and respected sports executive Matt Higgins has lead to the creation of the paradigm changing RSE Ventures.

At RSE Ventures, such problems simply don’t exist. There is no such thing as a matrix. There is no political infighting or overlapping responsibilities because each company operates independently of each other rather than just being a separate business unit within the same organization. Instead of self-preservation, there is only collaboration.

If you were to task a biologist with describing the interactions that occur among RSE companies on a daily basis, they could only refer to them as symbiotic – distinct organisms working together in harmony to solve one another’s problems. Such synergistic interaction allows these organisms to not only formulate a joint response to tackling unexpected crises, but also simultaneously position themselves to seize equally unpredictable opportunities. Moreover, it is symbiosis that leads to surprising and unpredictable outcomes, which drive change and fuel innovation.

“While you can’t physically generate serendipity, you can build an environment that amplifies the potential for it to occur,” explains Higgins. “It starts with creating permeability within your organization – you have to deliberately knock down the rigid walls that restrict the critical exchange of information and ideas. Similarly, you must allow for divergence and flexibility within your business strategy. While we always have a general idea of the direction we’re headed in with a particular company or project, we avoid having a fixed plan because we want to maximize the seizing of arbitrage opportunities.”

Symbiosis in business, as in nature, simply cannot occur unless each entity shares the same immediate environment. Which is precisely why RSE requires that all of their companies operate within a single shared space – in this case the 11th floor of an unassuming brick loft located within Manhattan’s Midtown West neighborhood.

Upon entering RSE’s office, one cannot help but be struck by the interplay between its minimalist design and the organized chaos contained therein. In one corner, a group of recent college grads hungrily pound the phones selling tickets to what will be the largest soccer match ever played on US soil. In another, a collection of MBAs draw flow charts across a whiteboard as they strategize how best to bring to market some groundbreaking new software product being developed just a few feet away. Meanwhile, in one of the transparent glass offices that line the perimeter, a group of executives sits packed around a conference table, negotiating a multi-million dollar broadcasting rights agreement.

There is, of course, a method to all this madness. Higgins and Ross are keenly aware that the most important element of leadership is the ability to create and manage culture before it manages you. While RSE’s work environment can seem frenzied and overcrowded at times, it is also their most powerful tool in shaping culture. When you’ve set out with the goal of building world changing companies, you can’t expect to use the same tactics that created the mediocrity you’re trying to replace. And as everyone knows, the only way you create a diamond is through a tremendous amount of pressure.

“Even the most disciplined of individuals can be their own worst enemy when it comes to getting things accomplished,” expounds Higgins. “It’s human nature to find excuses to delay, to use time as a crutch. If someone thinks they have options, they can never really fully commit themselves to getting the truly important things done. That’s why we’ve created this high pressure environment; our backs are against the wall and there is simply too much at stake to waste time and resources… If you can’t afford to lose, you won’t.”

Ironically, while it may seem at times as though RSE may be bursting at the seams, they have run into a unique problem – they cannot hire people fast enough to keep up with the growth of their companies. Obviously, it is not just about hiring people to fill roles, but hiring the right people. For RSE, when it comes to identifying such individuals, expertise and an impressive resume come second to character and capacity to sacrifice. They want true entrepreneurs – obsessive individuals that will go the ends of the earth to get the job done and motivate those around them to do the same.

According to Higgins, “The difference between those that say they’re entrepreneurs and those that actually are is that the latter don’t care about the end game. They don’t care if they become rich or famous; their only goal is to see their project succeed. If they’re ready to sacrifice everything they have for that, then they can call themselves entrepreneurs. Those are the types of people we look for at RSE –ambitious, gritty and relentless.”

There is no better example of this entrepreneurial zeal than that which is on display at Relevent Sports, a company who has overturned every misguided assumption about the viability of international soccer within the United States. One of the first companies to be borne of RSE, Relevent was created with the goal of capitalizing on the massively popular but largely meaningless international friendlies taking place across the country.

“We looked at the market and realized there was zero continuity in the way these games were being run and promoted,” recalls Ross. “More importantly, while they attracted fans, they were completely pointless for the participating teams outside of being just another payday. It didn’t take long for us to realize that if we could create a professionally managed event that actually meant something to these clubs, we could literally take ownership of what is arguably the most lucrative untapped [soccer] market in the world.”

To turn the concept into a reality, RSE recruited Charlie Stillitano and Jon Sheiman of CAA Sports to run Relevent. Both were widely considered to be the foremost experts on all things soccer within North America, and saw the tremendous potential of Ross’ vision.

Less than a year later, Relevent gave birth to the Guinness International Champions Cup, a twelve round robin contest between Europe’s elite soccer clubs hosted across North America during the summer. Among the participating teams this year are Manchester United and Real Madrid, the two most valuable sports franchises in the world. Over a million fans are expected to attend the tournament, which will be broadcast to over 150 different countries thanks to Catalyst Media Group, formed by RSE Ventures specifically to help sell the broadcast rights for the property. The Cup’s championship will, not surprisingly, be hosted at Sun Life Stadium in Miami, an RSE operated property.

The 2014 Guinness International Champions Cups will leverage America’s new found soccer fandom following the World Cup to showcase European’s top soccer clubs around the country.

“There’s a tremendous amount of complexity involved in organizing events like this that would scare most investors away. That’s why Stephen’s support has been so critical in making it all happen,” exclaims Higgins. “Instead of running from risk, he thrives on it. The guy has literally built an empire on risk. Stephen has some serious guts, and that’s exactly why Relevent is having such incredible success. His courage is contagious.”

Indeed, Ross’ pension for risk combined with Higgins’ ability to cultivate and manage culture has allowed RSE Ventures and its portfolio to grow and thrive at an unprecedented pace. Both men realize that the most successful business leaders and entrepreneurs achieve greatness not because they are smarter or cleverer than others, but rather because of their capacity to drop preconceived notions and concentrate on seizing opportunity. In putting their own egos aside, they are able to see through the clutter of the prevailing business environment and distinguish what is truly important from that which is merely a distraction. For Higgins and Ross, the biggest risk isn’t failure – it’s the danger of becoming mediocre.

So what does the future hold for RSE Ventures? The biggest clue can be found in the company’s recent announcement of a new venture capital partnership with social media champion and entrepreneur Gary Vaynerchuck. The $25 million seed fund, aptly named Vayner RSE, is the ultimate partnership for capitalizing on the ever growing digital revolution. While the fund will operate separately from RSE Ventures, the plan is the same – incubate and invest into technology companies that can be leveraged with other projects under the RSE umbrella to catalyze the extraordinary success of each.

Whether it be FanVision, Relevent Sports, Vayner or any other project RSE might be working on, there is little question that the future is bright for the company. RSE has proven in just two short years that organizations looking to not just compete, but thrive in a 21st century economy must be willing to evolve as quickly as the products and services that they themselves are attempting to create. Now more than ever, it is leadership at the top that is essential in shaping the culture necessary to speed up those very organizational processes. Yet it is those very leaders that must be willing to let responsibility fall equally upon the shoulders of every member of their organizations if they intend to maximize their collective potential.

And while Higgins and Ross insist that there is no end game when it comes to their ambitions for RSE Ventures, it does matter to them that they leave a positive legacy behind.

“Stephen is one of the most fundamentally decent people that I’ve ever met,” reflects Higgins. “He is incredibly wealthy and yet he genuinely cares about helping people. From the lowest to the highest on the totem pole, he’s willing to fight side by side in the foxhole with us. He literally gives everything he’s got until it hurts. That’s why whatever it is that we accomplish here at RSE, I hope we prove that you can have great success in business without compromising your values.

Jason Belzer is Founder of GAME, Inc. and a Professor of Organizational Behavior and Sports Law at Rutgers University. Follow him on Twitter @JasonBelzer.

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